Rаlph E. McCARTHY, Plaintiff-Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for Superior Bank F.S.B. and Conservator of Superior Bank F.S.B. (New Superior); Alliance Funding, a Division of Superior Bank F.S.B.; Superior Bank F.S.B.; Superior Bank F.S.B. (New Superior); Charter One F.S.B.; Missouri Capital Mortgage; Springfield Title Company; Springfield Closing Company; James Fossard, Trustee, Defendants-Appellees.
No. 02-56357.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted October 9, 2003, Pasadena, California. Filed November 5, 2003.
348 F.3d 1075
Ralph E. McCarthy, Pro se, Channel Islands, California, for the plaintiff-appellant. J. Scott Watson, Federal Deposit Insurance Corporation, Washington, DC, for the defendants-appellees. Appeal from the United States District Court for the Central District of Cаlifornia; Lourdes G. Baird, District Judge, Presiding. D.C. No. CV-02-03018-LGB. Before WALLACE, RYMER, and TALLMAN, Circuit Judges.
RYMER, Circuit Judge.
Ralph E. McCarthy appeals the dismissal of his action for damages for the way the Federal Deposit Insurance Corporation (FDIC) handled a loan that he was negotiating with Superior Bank, F.S.B. after the bank failed and the FDIC was appointed as receiver. The distriсt court held that it lacked subject matter jurisdiction because McCarthy failed to exhaust his claims pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA),
On July 27, 2001, the Office of Thrift Supervision (OTS) closed Superior Bank for insolvency, undеr-capitalization, and predatory loan practices. The FDIC, in its capacity as receiver, took possession and control of Superior‘s assets. On July 30, the OTS chartered a new institution, Superior Federal Savings Bank, F.S.B. (New Superior), and appointed the FDIC as its conservator. The FDIC transferred the assets of Superior to New Superior. According to McCarthy‘s complaint, the FDIC permitted Alliance Funding, a division of Superior, to continue servicing, soliciting and placing loans without disclosing that it was under receivership.
On August 1, Missouri Capital Mortgage, acting on McCarthy‘s behalf, obtained a pre-approved loan commitment from Alliancе in the amount of $117,400 secured by ten (out of thirty-five) acres of land owned by McCarthy with an appraised value of $138,000. McCarthy‘s full thirty-five acres were then reappraised at $177,000. On August 15, Alliance structured a new loan, this time with a principal amount of $138,000 secured by all thirty-five acres at a higher rate of interest.
McCarthy filed suit in federal district court alleging that he was coerced into accepting the new loan because it was offered on a “take-it-or-leave-it” basis and that he would not have executed this loan had he known of Superior‘s closure and the FDIC‘s receivership. His complaint seeks a declaration that the FDIC, Superior and Alliancе violated their fiduciary duties and damaged McCarthy in the amount of $50,400, that this sum should be offset against his loan with Superior, and that his interest rate should be modified.1
The FDIC moved to dismiss under
II
McCarthy argues that FIRREA does not apply to a debtor‘s action against the FDIC and that we have already said so in Sharpe v. FDIC, 126 F.3d 1147 (9th Cir. 1997), and In re Parker North American Corp., 24 F.3d 1145 (9th Cir. 1994). However, as we shall explain, these cases arose in different contexts and are not cоntrolling. The text of
FIRREA constrains judicial review as follows:
Except as otherwise provided in this subsection, no court shall have jurisdiction over —
(i) any claim or action for payment from, or any action seеking a determination of rights with respect to, the assets of any depository institution for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of such institution or the Corporation as receiver.
Parker arose in the special context of bankruptcy. It involved an adversary proceeding by a debtor in bankruptcy against Sooner Federal Savings and Loan Association to recover a partial payment on а sale and leaseback agreement that Parker claimed was a preferential transfer. After Sooner filed proofs of claim against Parker for the balance of the loan, OTS declared the institution insolvent and appointed the Resolution Trust Corporation (RTC) as receiver pursuant to FIRREA. The question was whеther the bankruptcy court had jurisdiction over the preference action against an institution for which the RTC had filed a proof of claim that exceeded the amount sought to be recovered by the debtor. We held that it did, explaining that the preference action incident to the RTC‘s collection efforts was nоt susceptible of resolution through FIRREA‘s claims procedure because it was not a claim by a creditor against the RTC; that Congress intended FIRREA to dispose of claims against failed financial institutions; and that bankruptcy courts have expertise to determine preference actions but the RTC does not. In this way we sought to harmonize the Bankruptcy Code and FIRREA so as to allow bankruptcy courts to determine matters in which they, not the RTC, have specific competence. But, as other courts have noted, Parker lacks force outside the bankruptcy context with which it was concerned. See Tri-State Hotels, Inc. v. FDIC, 79 F.3d 707, 714 n. 11 (8th Cir.1996); Freeman v. FDIC, 56 F.3d 1394, 1401-02 (D.C.Cir.1995). For reasons explained by Judge Wald in Freeman, we also decline to extend Parker beyond bankruptcy:
The concern underlying these cases [such as Parker] is clear: if bankruptcy courts are ousted of jurisdiction over a broad class of claims under the
§ 1821(d) jurisdictional bar, the unity of the bankruptcy process may be fractured and some bankruptcy-related claims would be determined, at least in the first instance, by FDIC administrative tribunals, which (it is argued) have little expertise in bankruptcy matters. For the reasons stated above, we do not think this constructiоn of the§ 1821(d)(13)(D) jurisdictional bar quite squares with the statutory text. But even if§ 1821(d)(13)(D) is narrowly construed as a limitation on bankruptcy courts’ jurisdiction in order to effectuate the purpose of the Bankruptcy Code, we decline to extend that approach to nonbankruptcy court contexts. To do so would not advance the purposes of the Bankruptcy Code, while it would undercut Congress’ core purposes in enacting FIRREA, which was to ensure that the assets of a failed institution are distributed fairly and promptly among those with valid claims against the institution, and to expeditiously wind up the affairs of failed banks.
We therefore hold that the § 1821(d) jurisdictional bar is not limited to claims by “creditors,” but extends to all claims and actions against, and actions seeking a determination of rights with respect to, the assets of failed financial institutions for which the FDIC serves as receiver, including debtors’ claims.
Id. at 1401-02 (internal quotations and citations omitted).
Apart from claims made in the context of a bankruptcy proceeding or arising out of a breach of contract in the circumstances present in Sharpe, we have held that a claimant must complete the claims process before seeking judicial review. Henderson v. Bank of New Eng., 986 F.2d 319, 321 (9th Cir.1993). In Henderson, we considered whether the FIRREA claims process applies to a cause of action by an applicant for a credit card against the FDIC as receiver of the bank that denied his application. Concluding that it did, we drew no distinction between creditors and debtors; rather, we held, “[t]he statute bars judicial review of any non-exhausted claim, monetary or nonmonetary, which is `susceptible of resolution through the claims procedure.‘” Id. (quoting Rosa v. Resolution Trust Corp., 938 F.2d 383, 394 (3d Cir.1991)).
Thus we see no reason why the plain meaning of the statute should not govern this case. McCarthy seeks the recovery of $50,400 for breach of fiduciary duty. Even though he asks that the payment be awarded by way of “offset” against the balance due on his loan from Superior, it is a payment nonetheless. The payment would diminish Superior‘s assets, as would lowering the interest rate and restricting remedial options that are available to the receiver. There is no reason why McCarthy‘s claims may not be processed administratively as effectively as Henderson‘s were. And, regardless of whether he is a creditor or a debtor making claim to the bank‘s assets, requiring exhaustion furthers the purpose of FIRREA “to ensure that the assets of a failed institution are distributed fairly and promptly among those with valid claims against the institution” and promptly to “wind up the affairs of failed banks.” Freeman, 56 F.3d at 1401 (citations omitted).
Other circuits have uniformly held that debtors’ actions are subject to FIRREA exhaustion. See Lloyd v. FDIC, 22 F.3d 335, 337 (1st Cir.1994) (holding that a suit by debtor seeking equitable reformation or cancellation of mortgage agreement is a “determination of rights with respect to [] the assets” subject to
III
McCarthy contends that even if debtors in general are required to exhaust, he does not need to exhaust his claims because they stem from conduct by the FDIC аfter its appointment as receiver.
Only the Tenth Circuit has gone the other way, see Homeland Stores, Inc. v. Resolution Trust Corp., 17 F.3d 1269, 1272-75 (10th Cir. 1994), primarily on the basis that the statutory time limit for presenting claims renders the administrative process unavailable for post-receivership claims.4 McCarthy suggests that we have already embraced the Homeland rule in Sharpe, but all that we did was to state what Homeland held. Sharpe, 126 F.3d at 1156. As those courts requiring exhaustion for post-receivership claims have pointed оut, the FDIC has interpreted
IV
Finally, McCarthy submits that FIRREA‘s administrative claim procedures do not apply to actions against the FDIC when the FDIC fails to give proper notice that it has become the receiver for a financial institution. He suggests that to hold differently implicates due process, apparently out of concern that claimants without notice may lose their rights on account of the short time period in which claims can be filed with the FDIC. However, we have already held that failure to give notice does not render the administrative clаims process inapplicable, Intercont‘l Travel Mktg. v. FDIC, 45 F.3d 1278, 1284-86 (9th Cir.1994), and nothing in the record before us suggests that the FDIC will not entertain McCarthy‘s claims or that administrative and judicial review will be precluded by virtue of time limitations. See
On the face of the statute,
AFFIRMED.